TMI Blog2006 (5) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the assessee filed an appeal before the learned CIT(A). It was argued before the learned CIT(A) that in view of the following decisions, interest under ss. 234B and 234C is not chargeable: (i) Priyanka Overseas Ltd. vs. Dy. CIT (2002) 75 TTJ (Del) 783: (2001) 79 ITD 353 (Del); (ii) CIT vs. Sedco Forex International Drilling Co. Ltd. Ors. (2004) 186 CTR (Uttaranchal) 144 : (2003) 264 ITR 320 (Uttaranchal); (iii) Haryana Warehousing Corporation vs. Dy. CIT (2000) 69 TTJ (Del) 859 : (2001) 252 ITR 34 (Del); (iv) Dr. (Mrs.) Devinder Kaur Sekhon vs. Asstt. CIT (1998) 67 ITD 407 (Chd). 3. The learned CIT(A) did not agree with this. By observing that s. 35DDA was introduced by Finance Act, 2001 w.e.f. 1st April, 2001, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee could not have envisaged that he would become liable for payment of tax even against VRS payments, which were otherwise allowable in view of the above two decisions of Hon'ble jurisdictional High Court. In any case by way of abundant caution, the assessee paid a further sum of Rs. 90,00,000 on 6th Aug., 2001 as self-assessment tax i.e. much before filing of return on 30th Oct., 2001. He then referred to the decision of the Delhi Bench of Tribunal in the case of Priyanka Overseas Ltd. vs. Dy. CIT, where interest under ss. 234B and 234C was held to be not chargeable because liability arose because of the amendment in the Act. He also relied on the decision in the case of ITO vs. State Bank of India (2001) 252 ITR 95 (AT). 5. On the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable by the assessee during that year, as computed in accordance with the provisions of this Chapter, is five thousand rupees or more." 7. A combined reading of the above provisions makes it clear that the assessee has to pay taxes in advance in respect of the total income of the assessee, which would be chargeable in a particular assessment year. Now, before the introduction of s. 35DDA, the legal dictum was very clear that the assessee could claim expenditure incurred on account of payment made for VRS by the assessee in view of the binding decisions of the Hon'ble jurisdictional High Court in the cases of CIT vs. George Oakes Ltd. and CIT vs. Simpson Co. Ltd. both cited supra. In both the decisions, it was clearly laid down by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 15th March, 2001 that he would not be entitled to deduct VRS payments. Therefore, the assessee could not have done anything other than to estimate the liability to pay advance tax on the basis of existing provisions. We are of the considered opinion that in such situation, it cannot be said that the assessee was liable to pay advance tax. Once, we come to the conclusion that the assessee was not liable to pay advance tax, there is no question of charging tax under ss. 234B and 234C. In similar circumstances in the case of Priyanka Overseas Ltd. vs. Dy. CIT, where the assessee hart treated the receipt of cash assistance as capital receipt, which was subsequently amended to be business receipt by the Finance Act, 1990, it was held that in s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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